Rocky Mount manager presents $276.7 million proposed FY26 budget; council weighs freezes, fee changes and deferred raises

City Manager Daniels presented the City of Rocky Mount’s proposed fiscal year 2025–26 operating budget of $276,722,140 at a Committee of the Whole work session, calling it a starting point and emphasizing that it is “proposed” and subject to council changes. The proposal includes no property tax increase, a recommendation to freeze 62 vacant positions and a package of operating and capital reductions intended to balance the budget without drawing on fund balance.

The proposed budget covers eight funds, with the general fund presented at roughly $95.4 million. Daniels said the proposal would put $1.5 million back into reserves and that “there is no property tax increase proposed.” He described five focus areas for staff work on the budget: public safety, people, fiscal stewardship, quality of life and infrastructure.

Why it matters: the plan would reshape services, capital projects and personnel decisions citywide while the council decides whether to restore cut items, authorize fee changes or raise revenue. Daniels and budget staff said the document aims to preserve essential services while improving fiscal transparency after recent years’ budget practice changes.

Major figures and proposals

- Total proposed operating budget: $276,722,140 across general, utilities and enterprise funds. - General fund size (proposed): about $95.4 million (reduced roughly $4 million from last year’s adopted general fund figure in the manager’s presentation). - Net proposed reductions across funds: a total reduction of about $7,227,220 compared with the prior baseline presented in the slides. - Frozen vacancies: 62 vacant positions recommended frozen (manager said this equals about a $4.0 million conservative savings estimate); staff clarified that the 62 includes 54 in general funds and 8 in enterprise funds. - No appropriation of fund balance in the proposed budget; managers instead propose modest contributions back to reserves. - Financing: staff plan approximately $6.8 million in installment financing for capital items (manager said this is about 21% less than the prior schedule).

Personnel, wages and benefits

Daniels proposed no new positions in FY26 and recommended freezing current vacancies rather than eliminating positions. He asked the council to consider a midyear cost-of-living adjustment (COLA) in January as a separate item, estimating a 2% midyear COLA would cost roughly $600,000; the regular, merit-based increases that the city typically funds annually would cost about $1.8 million if fully implemented. Daniels told the council the proposed budget does not include those increases now but asked for guidance on whether to target a midyear COLA.

Capital and operating trade-offs

Budget staff listed several capital improvements deferred from the proposed FY26 plan to reach balance, including a roughly $900,000 Battle Born Community Center project, warehouse and technology improvements, some police special-response equipment and neighborhood park renovations. Daniels said priorities for capital investment will focus on maintenance and essential growth and that the council could restore cut items if it chooses.

Public events, outside agencies and downtown funding

Daniels said the proposed budget preserves funding for community events the city runs (for example, barbecue throwdown, Juneteenth), but staff reduced some partner event budgets (he noted a downtown event budget was reduced from about $175,000 to $75,000 in his proposal). He also told the council he left outside-agency funding (libraries, Gateway Partnership and similar partners) at current levels because those were prior council commitments.

The manager proposed eliminating the downtown municipal service district (MSD) for the coming year as one potential cut; council members pressed to retain the MSD or consider expanding it to include the Edgecombe County side of downtown. Staff said the MSD currently raises about $75,000 and that removing or modifying it would require a public hearing and follow statutory steps.

Fund balance and financial targets

Council members pressed staff for clear targets. Daniels and budget staff said the city is currently below the city policy target for unassigned fund balance (staff cited a recent audit-era balance around 6.5%). Council discussion identified an approximate $5–6 million goal to return unassigned fund balance to a stronger position (the manager and finance staff described that as the ballpark to move toward a 10% target but noted audit-year variability and timing uncertainty).

Utility funds and potential electric-rate change

Budget staff and an outside consultant, Kyle Blanton of Argrid Power (financial consultant), presented the electric utility’s cost-of-service findings and rate options. Blanton said the electric utility “as a whole is under recovering about 42 and a half million dollars” across a multi-year planning horizon if no changes are made. He presented three rate-path options that differ in how much of the burden to place on residential customers versus larger commercial and industrial classes:

- Option A (more rapid residential increase): residential increases totaling about 5.7% over the initial step and 3–5% across other classes; projected to reduce the residential shortfall but still leave a multi‑million-dollar gap over the planning horizon. - Option B (balanced approach): roughly a 4% residential increase with correspondingly higher adjustments to medium and large commercial classes; staff presented this as a middle ground. - Option C (lower residential shock): about 3.5% residential increases with higher increases for industrial and larger commercial customers; staff emphasized it would ease immediate pressure on standard households but shift more to commercial customers.

Blanton and staff also said chosen changes would strengthen utility fund balance by roughly $8 million over the study horizon under the modeled options. Staff noted the city has not raised retail electric rates materially since 2017 and that recent wholesale “true-up” charges from the electric wholesaler contributed to the current gap.

Public hearings and next steps

Daniels outlined the near-term schedule in the presentation: a virtual town‑hall on the budget on the city’s YouTube channel at 7 p.m. the following day, another budget work session on June 2 at 5 p.m., a possible meeting on June 4 if needed, a public hearing at the June 9 council meeting at City Hall, and a target final-adoption meeting of June 23 at 4 p.m. Staff told council they will return with more detailed breakdowns requested by council (five-year event spending trends, departmental cuts details, updated environmental-service fee comparisons, and more granular impacts of proposed utility-rate options on typical business subclasses).

What council members pressed for

Council members repeatedly asked for clearer, comparable line-item detail and multi-year trends (3–5 years) on event spending, travel and consultant contracts, and the specific dollar impact by customer class for any proposed utility-rate change. Several council members urged staff to pursue non-tax revenue and operational efficiencies (code enforcement collections, improved tax-collection follow-up and travel/conference cost reductions) in addition to expenditure reductions.

Ending

Daniels closed by reiterating the package is the manager’s proposed budget and that the council will decide what to adopt. Staff said they will return with the detailed information requested and that public engagement begins immediately with the posted town hall and the formal June public hearing timeline.